SESSION 4 GENDER ISSUES IN TRADE. SESSION GOALS To Introduce Participants to: The relationship between trade and gender outcomes Methods to analyze gender

SESSION 4GENDER ISSUES IN TRADE

SESSION GOALS

To Introduce Participants to:

• The relationship between trade and gender outcomes

• Methods to analyze gender impacts of trade• Recent studies of the gender impacts of trade,

including GATE work

The Question: How to Reduce Gender Inequalities?

“A crucial question concerns the sharing of potential gains from globalization between rich and poor countries, and between different groups within a country.” Amartya Sen

GENDER ISSUES IN TRADE

Trade and Poverty Alleviation

• Trade has the potential to reduce poverty but is insufficient alone.

• As trade increases, growth rates rise. Increased growth is associated with lower absolute poverty - but not necessarily relative poverty.

• Sequencing and timing of trade liberalization is important.


Trade Definitions

• Trade liberalization – the reduction of tariffs and removal or relaxation of non-tariff barriers

• Trade integration – the broader economic process of increasing exchanges with other countries, expanding trade as well as flows of capital, labor, technology, and communications

• Trade policy - the political process undertaken by governments forming national commitments to legally binding bilateral, regional, and multilateral agreements


Trade Liberalization: Recent Trends

• Scope of agreements has widened– Environment– Labor conditions

• Bilateral and regional rather than multilateral

• Quality and source standards (e.g. EURGAP, SPS) remain more important barriers than tariffs or quotas for many products


Gender, Trade, and Gender Inequality

• Trade liberalization is not gender-neutral

• Export promotion is not gender-neutral

• Increasing regional trade is not gender-neutral


Why Address Gender Inequalities?

• Increases allocative efficiency of labor

• Improves a country’s growth and economic outcomes

• Increases intergenerational transmission of wealth


Gender Impacts of Trade

Men and women are differentially affected by changes in trade due to:– Asymmetric rights and responsibilities– Differing reproductive roles– Gendered social norms– Labor market segmentation– Consumption patterns– Women’s time poverty– Class, age, ethnicity, religion and/or geography


Trade Impacts on Household Welfare

World Prices and Quantities

Exchange Rate Tariffs, QRs Tariff Revenue

Border Prices

Wholesale Price

Retail Price

Household Welfare

Prices, Wages

Endowments

Profits, Other Incomes

Endowments

Profits

Wages

Employment

Men

Women

Taxes

Spending

Elderly

Young


Gender Impact of Trade Liberalization

Price Transmission

– Changes in prices of liberalized goods– Changes in relative prices of domestically produced

and internationally traded goods– Prices affect households (men and women)

differently depending on whether they are net-consumers or net-producers

– Price declines benefit consumers over producers and vice-versa


Gender Impact of Trade Liberalization (cont.)

Profits, employment, and wages

– If factors of production are fully employed, price changes will be reflected in wages

– If large pool of unemployed, liberalization will change employment

– Employment of poor and men/women depends on type of employment changes

– Terms and conditions of employment may change


Gender Impact of Trade Liberalization (cont.)

Taxes and Spending

– Changes in government revenues affect social spending and anti-poverty programs


Methodologies to Examine Gender Impacts of Trade and Trade Agreements

• Computable General Equilibrium (CGE) Models– Description of the Economy with simplifications

(assumptions)– Gender analyses differentiate between male and

female workers and male and female consumers• GATE South Africa and GATE Bangladesh studies

• Intra-household Models– Can be used to model household decision-making– Can be inserted into CGE or used independently


Methodologies to Examine Gender Impacts of Trade and Trade Agreements (cont.)

• Empirical Studies– Studies of specific sectors

• GATE Bangladesh Ready-made Garments• GATE Bangladesh Shrimp Sector

• Legal and Regulatory Approaches– Examines whether or not the commitment contains any

overt gender bias – Examines whether or not the commitment conflicts with or

undermine the country’s other international commitments and domestic laws relevant to women

• GATE Bangladesh Trade Impact Review


GATE Studies on Gender Impacts of Trade Liberalization

South Africa• “Gender Dimensions of the Incidence of Tariff Liberalization”• “Has Trade Liberalization in South Africa Affected Men and

Women Differently?”• “Trade Liberalization and Gender Impacts on Employment by

and Ownership of SMMEs” (unpublished)Bangladesh • “Gender and Trade in Bangladesh: The Case of Ready-Made

Garments”• “Trade Impact Review for Agriculture and Manufacturing”


GATE/South Africa Study – “Gender Dimensions of the Incidence of Tariff Liberalization”

• Explores the differential impact of tariff revision on male- and female-headed households in South Africa

• Asks how have tariffs changes, who bears the costs of tariffs, and how does this potentially affect their welfare?


GATE/South Africa Study - “Gender Dimensions of the Incidence of Tariff Liberalization” - Percent of Category by Expenditure Decile, 2000

Consumption Schedule: 2000 Supply & Use Commodity Expenditures

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10

Expenditure Deciles

Per

cen

t

Household Services

Household Goods

Personal Goods

Tradable Vehicle Parts

Housing (Not Ow ned)

Clothing & Textiles

Alcohol & Tobacco

Food & Non-alcoholic Beverages



Differences in mean percent consumption expenditure by decile and sex of household head

Decile Food & Bevs.

Alcohol & Tob.

Cloth & Textile

Accommodation Traded Vehicle Parts

Personal Goods

HH Goods

HH Service

1 -2.62* 4.79* -1.31* -0.32 0.01 -0.91* 0.21 0.15

2 -2.69* 4.22* -0.49 0.70 0.03 -0.98* -0.08 -0.70

3 -3.54* 3.21* -0.49 1.41 0.05* -0.91* 0.36 -0.09

4 -4.79* 3.65* 0.22 2.07* 0.08* -0.99* -0.37 0.13

5 -4.29* 2.74* 0.98* 1.18* 0.08* -1.14* 0.30 0.16

6 -4.52* 3.34* 0.88* 0.77* 0.43* -0.93* 0.94* -0.92

7 -3.24* 3.05* 0.25 0.00 0.18 -0.69* 1.23* -0.79

8 -1.25 1.61* -0.69 0.06 0.52* -0.50* 1.71* -1.45

9 0.32 1.00* -0.74* -1.85* 0.76 -0.63* 1.95* -0.82

10 -0.97 0.08 -0.46 -2.31* 0.99 -0.25 0.14 2.79*

A negative figure implies that male-headed households spend less on a particular group of products, while a positive figure implies that male-headed households spend more than females.


GATE/South Africa Study – “Gender Dimensions of the Incidence of Tariff Liberalization”• South Africa joined the WTO in January 1995. Between

1995 and 2004 total tariff revenue declined from approximately 35 billion to 20 billion Rand.

• The poorest households saw average declines in their payment of tariff revenues as a percent of their total consumption from between 15 and 16 percent to approximately 9 percent of total expenditure.

• The wealthiest households experienced declines in the estimated tariff incidence from approximately 11 percent to a little over 5 percent.


GATE/South Africa Study – “Gender Dimensions of the Incidence of Tariff Liberalization”Results of Study :

Understand consumption and production by the poor and men/women

Reducing tariffs has the potential to improve welfare of the poor if these reductions are passed on to consumers

Consider sex of household hold in transfers and programs to minimize the effect of changes in trade regimes



“The sex of the household head matters, and must be considered independently from anything else when considering the full scope of tariff liberalization.”


GATE/Bangladesh Study – “Trade Impact Review for Agriculture and Manufacturing”

• Synthesis of significant gender impacts of trade and trade agreements focusing on employment both economy-wide and in specific sectors (i.e., ready-made garments, shrimp)

• Three approaches: CGE Model, empirical studies, and legal and regulatory approach



• Trade liberalization during 1990s significantly increased employment in export sectors (textiles) up to 80% of employees are women

• Impact of changes in Trade agreement (end of Multi-Fiber Agreement): – Surprisingly change did not result in significant increases in

unemployment– Textile industry adjusted increasing volume with pressure

on wages and employment conditions– Shift from Ready-made garments to knit garments implies

shift from female-intensive to male-intensive labor



Impact on women:• Movement to less secure employment

contracts• Downward pressure on wages• More vulnerable to unemployment (especially

at higher education levels with fewer options)


Gender Impacts of Trade: AGOA

• Few gender-related empirical studies or case studies

• 2005 study on East Africa concludes AGOA created employment for women particularly in textiles and apparel and horticulture (e.g. Madagascar export processing zone, Kenya EPZs).

• Few women businesses – generally in handicrafts and gift articles

• Barriers to women in business remain




Employment in Kenya Export Processing Zones

0

5000

1000015000

20000

25000

30000

2000 2001 2002 2003 2004

Years

Em

plo

ymen

t

Men

Women

Wage Increases in Madagascar’s Textile and Apparel Industry, 1997-99

Type of Employee

Share of Labor Force

Wage Increase

Skilled Males 18 34

Skilled Females 37 23

Unskilled Males 7 11

Unskilled Females 38 0



Constraints/Challenges– Limited collateral or access/control over productive

assets– Poor working conditions– Limited job security– Lack of business and managerial skills– Concentration in informal sector– Lack of ICT infrastructure, literacy, etc.



• Change should focus on: – Closing wage gaps and differences in contracts

between men and women in export processing industries

– Increasing women’s capacity to start, upgrade, and expand export businesses

• Actions include:– building capacity– strengthening women business associations– increasing access to productive assets


Gender Impacts of Trade: Overall Trends and Evidence from GATE Studies

• High labor segmentation in export industries• Female employment increases and contracts with

expansion and contraction of specific industries• Women have high employment ratio in Free Trade

Zones (FTZs)/ Export Processing Zones (EPZs)• Women in insecure employment categories with fewer

benefits• Women rarely represented in owner/manager positions

in export industries• Wages both within and across employment categories

for many export industries show large gender gap


East Africa Gender and Trade

• East Africa’s economies must grow 7-8 % annually to reduce poverty (CAADP 6% goal)

• Current Growth Rates: Kenya 7%; Rwanda 5.5%; Tanzania 5%; Uganda 5%

• Poverty has been reduced, but income inequality between urban and rural areas has risen

• 80 % of poor in rural areas dependent on agriculture or agriculture-related activities

• Significant growth can come through trade – regional and international


East Africa Trade Areas Actions


COMESA and ECA – Common External Tariff agreements

• Analysis of gender impacts• Increase participation of women’s groups in trade negotiations

Export promotion • Upgrade value-chains

Increased Regional Trade • One-Stop Border Posts• Facilitation for small-volume trading

Non-tariff barriers – EURGAP, SPS

• Trade capacity building for women-owned businesses

EPZs and FTZs • Improve work conditions• Improve upward job mobility for women

Recommendations to Improve Gender Equity through Trade and Export Promotion Programs• Conduct appropriate analyses

– Identify gender labor market segmentation– Identify consumption patterns by income and gender

• Reduce barriers to equalize gender access to trade benefits

• Identify specific areas that benefit gender equality (e.g. commodities, sectors)


Recommendations to Improve Gender Equity through Trade and Export Promotion Programs• Upgrade versus squeezing wages in

competitive industries

• Focus efforts on diversifying exports and increase forward and backward linkages

• Ensure legal and regulatory environment reflect interests and concern of poor and women


Documents

SESSION 4 GENDER ISSUES IN TRADE. SESSION GOALS To Introduce Participants to: The relationship between trade and gender outcomes Methods to analyze gender